\u3000\u3 Shengda Resources Co.Ltd(000603) 127 Joinn Laboratories (China) Co.Ltd(603127) )
Event: on March 30, 2022, Joinn Laboratories (China) Co.Ltd(603127) released the annual report of 2021. The company achieved an annual operating revenue of 1.517 billion yuan, a year-on-year increase of 40.97%; The net profit attributable to the parent company was 558 million yuan, a year-on-year increase of 76.96%; The net profit deducted from non parent company was 530 million yuan, with a year-on-year increase of 81.63%; The company’s annual net operating cash flow was 686 million yuan, an increase of 60.06% year-on-year.
Comments:
The performance was in line with expectations, and the net interest rate was increased by multiple factors. In 2021q4, the operating revenue was 660 million yuan, a year-on-year increase of + 48.49%, the net profit attributable to the parent was 309 million yuan, a year-on-year increase of + 57.30%, and the net profit not attributable to the parent was 313 million yuan, a year-on-year increase of + 61.81%. The performance of the whole year and Q4 increased significantly. The company’s comprehensive gross profit margin was 48.73%, with a year-on-year decrease of 2.65pp. We believe that the price rise of big animals and new business expansion affect the performance of the annual gross profit margin. The net interest rate attributable to the parent company was 36.76%, up 7.48pp year-on-year, and the expense rate during the period was 19.83%, down 5.70pp year-on-year. During the reporting period, changes in fair value, dilution of management expenses due to scale effect, interest income from Hong Kong stock financing and other factors all improved the net interest rate level of the company, and the company will continue to benefit from the improvement of profitability due to scale effect.
Capacity and orders provide long-term high growth momentum. In 2021, strong demand continued to bring high orders, and the number of new orders signed in the whole year exceeded 2.8 billion yuan (more than 2.55 billion yuan in China, a year-on-year increase of more than 65%; more than 280 million yuan abroad, a year-on-year increase of about 75%). In order to match the high growth orders, the company continued to invest in the construction of production capacity, invested about 7500m2 of feeding facilities in Zhaoyan, Suzhou in 2021, and completed the decoration and filing of 1800m2 P2 level laboratory. At the same time, the company started the phase II expansion of Suzhou Zhaoyan (about 20000m2, mainly feeding facilities), and H2 is expected to be put into use in 2022; Wuxi drug release evaluation center is carrying out laboratory decoration; Guangzhou Zhaoyan safety assessment base was started in October 2021 and is under construction; In the same year, Zhaoyan California newly renovated a test facility of about 6000m2.
The overseas expansion is fruitful, and the integration of preclinical + clinical is worth looking forward to. In 2021, biomere’s early discovery business formed a good linkage with the domestic pre innovation evaluation business. Biomere’s newly signed orders were about 280 million yuan (+ 75%), and China’s overseas orders were about 160 million yuan (+ 100%), showing a high growth trend. The overseas expansion was smooth and the internal and external linkage was obvious. In terms of clinical cro business, the company is steady and steady, continuously obtains customer trust, and realizes the linkage between preclinical and clinical business. The future development is worth looking forward to.
Profit forecast and investment rating: we expect the company’s operating revenue to be RMB 2.125/2.872/3.794 billion from 2022 to 2024, with a year-on-year increase of 40.1% / 35.1% / 32.1%; The net profit attributable to the parent company was RMB 723 / 936 / 1218 million respectively, with a year-on-year increase of 29.7% / 29.4% / 30.1%, corresponding to 61 / 47 / 36 times of PE from 2022 to 2024.
Risk factors: increased industry competition, loss of core technical personnel, decline in pharmaceutical R & D investment or outsourcing rate, and the progress of new business is less than expected
